Financial news

Bulgaria’s ministers are due today to present to finance minister Simeon Dyankov plans to slash a further BGN 474 million expenses to fulfill an item in the government’s stimulus package to rein in administrative costs by BGN 900 million. On Friday, ministers submitted to Dyankov plans for cuts and administrative reforms, which, however, could only save BGN 426 million. Dyankov said two weeks ago that austerity is the only alternative to the much-feared rise in the value-added tax (VAT) from 20% to 25%. Once they have been submitted, the new plans will be discussed by the Administrative Reform Council at the Ministry of Finance. A summary of proposals is expected to be considered by the government.

The European Bank for Reconstruction and Development (EBRD) upgraded its forecast for economic growth of the countries in Central and Eastern Europe (CEE) from 3.3% to 3.7% for 2010. The new data was announced at the 2010 EBRD Business Forum which is being held on the occasion of the Nineteenth Annual Meeting of the EBRD Board of Governors in Zagreb, Croatia, Friday and Saturday. In the light of the general positive trend, the fiscal forecast for Bulgaria, however, is worsening – while in January 2010, EBRD said they expect Bulgaria’s Gross Domestic Product (GDP) to remain unchanged, their new forecast if for a 1.2% fall over the effects of the global and Greek crisis.

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Privatization

Revenues from privatization this year should reach at least BGN 200 million, a major contributor to this will be the transactions of Bulgartabac Holding, Montagi and Vazov Machine Works Sopot (VMZ). The Privatization Agency (PA) hopes to find new owners at least 10 companies with a predominantly or wholly state-owned capital and to trade dozens of minority stakes in an already predominantly private companies this year. The list of companies for sale includes Kintex, NITI, Industrial Engineering, Expomed, which exports medical personnel abroad, 75 percent of the state in Sunny Beach, etc. Experts say that additional BGN 250 million will come if the state shares in three companies that hold electricity distribution network in Bulgaria, go into private hands.

Companies

Bulgaria’s Corporate Commercial Bank holds nearly half of the money of strategic state-owned companies. The data was provided Sunday by Finance Minister Simeon Djankov. The eighteen companies listed include the Bulgarian energy holding and its units (gas monopoly Bulgargas, gas pipeline operator Bulgartransgas, state power utility NEK, nuclear power plant Kozloduy, thermal power plant Maritsa East II), as well as tobacco monopoly Bulgartabac, Bulgaria Posts, Sofia Airport, the Bulgarian Railways Company. Nearly 65% of the money of these companies are concentrated in three banks, whose market share does not exceed 9% - Corporate Commercial Bank (48%), EIBank and the Central Cooperative Bank, the data shows.

Bulgaria’s Communication Regulation Commission (CRC) has invited a tender to construct the multiplex that will mix the digital signal of the Bulgarian National Television (BNT) and the Bulgarian National Radio (BNR). The project will enable the two broadcasters to transmit digitally on a national scale. The competition is being held in line with EU regulations that force channels to abolish analogous broadcasting by the end of 2012. Seven companies have already expressed interest in the competition. The list includes the Bulgarian Telecommunications Company (BTC), which is in the process of selling its unit operating its radio and television transmission network.

Austrian company EVN remains partner of the state in the project for building hydropower cascade Gorna Arda after the other shareholder in the consortium - Alpine Bau, has withdrawn from participation. This was announced by the company that manages the electricity distribution network in Southwestern Bulgaria. After its withdrawal, Alpine Bau transfers all rights and obligations in the project to EVN. The company is expected soon to offer NEC an updated cooperation agreement, reflecting the new circumstances. This will probably require a change of government decision of September 2009, which determines EVN and Alpine Bau for investors in the project, in order to replace the Turkish participant CCG. Thus, EVN will receive its own share of 30% of the hydropower company Gorna Arda, which was established in 1999.

Corporate Commercial Bank (CCB), with a score of BGN 2.21 billion, ranks ninth in terms of assets, as the latest statistics about the local bank market show. UniCredit Bulbank is on top of the list, with the bumper figures of BGN 11.497 billion. Next in the top list comes DSK Bank with BGN 8.68 billion, United Bulgarian Bank (UBB) – 7.945 billion, First Investment Bank (FIBank) – BGN 4.310 billion. CCB has been the lender with the highest growth pace of profits, posting some 36.10% in Q1 of 2010 compared to Q1 of 2009. When it comes to profits, UniCredit Bulbank is in the lead with BGN 37.97 million. Its credit portfolio runs up to BGN 7.366 billion.

Europe

Airbus parent company EADS NV on Friday reported that first quarter net profit fell 39 percent as its planemaker unit struggled with the "challenges" of producing its A380 superjumbo. Paris-based European Aeronautic Defence & Space Co. said that net profit in the January to March period fell to euro103 million ($129 million) from euro170 million a year earlier. Revenue fell 6 percent to euro 9 billion in the period, EADS said in a statement. Airbus is struggling to ramp up production of the A380 because the cabins of the hulking plane require greater customization than other plane models. The plane "will continue to weigh substantially on" earnings in 2010, EADS said.

America

Sales continued to rise at American retail stores in April, an indication that the economic recovery was progressing. The Commerce Department said Friday that retail sales reached a seasonally adjusted $366.4 billion in April, a 0.4 percent increase that was slightly better than industry analysts expected. The sales figures coincided with the release of other indicators — on industrial production, manufacturing and consumer confidence — that also pointed to strengthening economic performance. But there were still signs of fragility. Much of the rise in retail sales was fueled by sales of building materials, which expanded 6.9 percent, while decreases were reported at several categories of retail stores. And the rate of overall increase was lower than in March, when sales expanded at the more robust revised monthly rate of 2.1 percent, the government said. Still, it was the seventh consecutive monthly increase, and the results were 8.8 percent higher than in April 2009. 

Asia

China Mobile Ltd., the world’s biggest phone carrier by market value, will look for acquisitions in emerging markets to expand its overseas operations, Chairman Wang Jianzhou said. The company doesn’t have specific targets, Wang said at the ICT and Urban Development conference in the eastern Chinese city of Ningbo. China Mobile hasn’t considered acquisitions in Europe, he said, adding asset prices in emerging markets and Europe remain too high. China Mobile is searching for investments and acquisitions to revive profit growth after posting earnings that missed analysts’ estimates. The Beijing-based company this year agreed to buy a 20 percent stake in Shanghai Pudong Development Bank Co., a move that the carrier said will help accelerate development of its wireless payment and finance operations.

Krushuna

Krushuna village is situated next to the Devetashko plateau, where the last slopes of Stara Planina become common uplands, and where the Danube plain begins. It is 34 km away from the town of Lovech. In 1976-77 mineral water was discovered in the southeastern part of the village. The picturesque Maara neighbourhood is located in the southern part of the village. Its high rocks shape up an enormous horseshoe on the edge of the Devetashko plateau. The Waterfall cave is about 800 m away from Krushuna. It is one of the most beautiful caves in Bulgaria. It represents a complex water labyrinth. The water goes through many barriers, forming the magnificent waterfall Krushuna and a cascade of beautiful lakes. The galleries of the cave are originally covered with specific perfectly white shapes, which, on the background of the brown vault arch, create a magnificent view. Besides the Waterfall cave there are also other caves in the region like Urushka maara, Gornik, Devetashka cave, etc., which impress with the size of their entrance halls. Near the village Krushuna there is an eco-path.

On that day:  Batak municipality public holiday Bulgaria’s membership in UNESCO